A company with a current ratio higher than industry average must also have a quick ratio higher
than industry average because both ratios measure liquidity.
Indicate whether the statement is true or false
Question 2
Company A reports sales of 100,000 and net income of 15,000. Company B reports sales of
100,000 and net income of 10,000. Therefore
A) Company B is creating less value for its shareholders than Company A.
B) Company A's cash flow may be higher or lower than Company B's cash flow even though A's
net income is higher.
C) Company A's cash flow is 5,000 more than Company B's cash flow.
D) Company B's accounts receivable must be higher than Company A's accounts receivable.